The New Brunswick government is spending $ 14 million to partially reduce property tax bills by 2022 for residential and commercial properties, which were affected by an increase in estimates of more than 10 percent this year.
The decision overturns an earlier government stance on granting relief only in the form of tax cuts this year, and comes after weeks of strong pressure from landlords and other business property owners.
In some cases, when combined with reductions in municipal and provincial tax rates already provided on commercial property, it promises to reduce property tax bills on some current buildings to below what they paid last year.
“Our government has heard from individuals and the business community that we need to deal with the high tax burden in New Brunswick and the cost pressures they are facing,” said Finance and Finance Council Minister Ernie Steves in announcing the package. help.
The Cameron Street 50 building in Moncton is one of 77 owned by Killam in New Brunswick. He is eligible for a $ 15,000 property tax rebate in the event of a change in valuation announced by the province. In addition to the tax cuts made by Moncton and the province, the building will pay less tax in 2022 than in 2021 (Pierre Fournier / CBC News)
Tax rebates will be large for some properties, but will have some restrictions.
They do not apply to properties for rent with less than four apartments. They also do not cover property owners who have triggered their own higher valuations and tax bills by buying rental properties or business properties at high prices in 2021 or by significantly renovating properties last year.
The rules mimic the rating of “spike protection” that homeowners in New Brunswick have had since 2013. According to these rules, significant increases in house valuations must be applied for two or more years by a maximum of 10 percent per year.
For example, a sudden increase in valuation of 30 percent in one year takes three years to apply in full to a property owner’s tax account.
The program for renting and commercial real estate will mostly reimburse the municipal property taxes charged this year for buildings with a high increase in estimates. It is paid by the province because local authorities set their budgets months ago
“This program will be fully funded by the provincial government and will not affect local government property tax revenues,” the government said in a statement.
Keith Hickey of the nonprofit group Housing Alternatives in St. John welcomed the initiative.
“This means that we can ensure that these housing units remain accessible to the residents who currently live there,” Hickey said.
Housing Alternatives owns a number of rental properties, some of which have had large valuation increases this year. A 12-unit building he owns in Lauder Court, which has a 20 percent increase, will qualify for a $ 870 discount under the new policy, or about $ 72 per apartment.
“Until our costs increase, we do not increase rents,” Hickey said.
But the biggest beneficiaries will be large rental companies such as the Halifax-based Killam Real Estate Investment Trust, New Brunswick’s largest landlord.
New Brunswick Prime Minister Blaine Higgs said the $ 14 million property tax rebate program aims to encourage new construction, although the program only pays for existing buildings. (CBC News)
In financial documents last month, he said he had received an “average increase of 15 percent” in appraisals of his properties in New Brunswick, which included 77 properties and 5,073 apartments.
His Cameron Street shopping and apartment complex in Moncton has received a 20% increase in valuation and will qualify for a $ 15,000 discount on property tax alone under the new policy.
Combined with property tax cuts passed earlier this year by both the province and the city of Moncton, this will reduce Killam’s tax bill for the Cameron building to $ 166,000 by 2022, just below what has paid in 2021
New Brunswick Prime Minister Blaine Higgs said further relief was needed to encourage landlords to continue building housing, although the discounts are specifically for existing properties and do not apply to newly built homes.
“It was another way for apartment owners to really stay focused on building new homes,” Higgs said.
“What we’ve proposed is just to deal with ‘Okay, how to get people to invest so we can get more housing on the market.’
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